Pick of the Day: EUR/USD

Not much for today’s trade idea other than to continue to play the rising EUR/USD trend as traders continue to take bets off that the Fed will hike rates soon.

After holding rates a 2.00%, the Fed commented on rising inflation risks and that growth risks have “diminished somewhat.” Basically, in my opinion the Fed is trying to stall for now to see if either inflation will come down or if the rate cuts will help boost growth. Until the Fed actually hikes rates to fight inflation, I believe they will continue to “jawbone” as they know that this may be their only weapon on keeping inflation in check and keeping growth risks steady. But long can this last?

Inflation rises and wages aren’t keeping up. Job growth, housing, and consumer confidence is hurting. In my opinion, I think the the Fed will opt to save the average joe by keeping rates steady, possibly until the end of the year and keeping me USD bearish for now.

On that note, here’s my trade idea for EUR/USD if we see a pull back on today’s rally…

Long EUR/USD at 1.5600, stop at 1.5550, pt1 at 1.5650, pt2 at 1.5700

Never risk more than 1% of your account on any single trade. Adjust position sizes accordingly.

Good luck and good trading!

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About Pipcrawler

Every day, I try to find what I believe is the best looking short term currency trade setup for the upcoming trading day or week. If you're a forex newbie, it can be tricky trying to figure out how to look at charts and draw lines. My goal is help you understand the psychology behind price movements in the foreign exchange markets, so you can learn to analyze your own currency charts and trade on your very own. To help you understand my trading approach, please read about my trading framework.

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